Narrated Abdullah (radiallahu anhu): The Prophet (salallahu alaihi wasallam) said, “Truthfulness leads to righteousness, and righteousness leads to Paradise. And a man keeps on telling the truth until he becomes a truthful person. Falsehood leads to Al-Fujur (i.e. wickedness, evil-doing), and Al-Fujur (wickedness) leads to the (Hell) Fire, and a man may keep on telling lies until he is written before Allah, a liar.” [Sahih Al-Bukhari, Volume No. 8, Hadeeth No. 116]

Lying is one of the signs of hypocrisy:

آية المنافق ثلاث : إذا حدث كذب ، وإذا وعد أخلف ، وإذا اؤتمن خان

Narrated Abu Hurairah (radiallahu anhu): The Messenger of Allah (salallahu alaihi wasallam) said, “The signs of a hypocrite are three: Whenever he speaks, he tells a lie; and whenever he promises, he breaks his promise; and whenever he is entrusted, he betrays (proves to be dishonest)”.[Sahih Al-Bukhari, Volume No. 8, Hadeeth No. 117]

It was narrated that Abu Umamah (radiallahu anhu) said: The Messenger of Allah (salallahu alaihi wasallam) said: “I am the claimant* of a house on the outskirts of Paradise for the one who refrains from opinion based arguing, even if he were in the right, and a house in the middle of Paradise for the one who refrains from lying, even when he is joking, and a house in the highest part of Paradise for one makes his character good.”[Sunan Abee Dawood, Hadeeth No. 4800. Graded “hasan” by Al-Albani in Sahih Sunan Abee Dawood, Hadeeth No. 4800.]

[*He is guaranteeing this person a house in Paradise.]

[Note to parents: Those “little white lies” that you tell your children are just that – lies.]

Beware of lying in order to make others laugh:

ويل للذي يحدث فيكذب ليضحك به القوم ، ويل له ، ويل له

It was narrated that Bahz ibn Hakim said: “My father narrated to me that his father said: “I heard the Messenger of Allah say: ‘Woe to the one who speaks and tells lies in order to make the people laugh; woe to them, woe to them.'”” [Sunan Abee Dawood, Hadeeth No. 4990. Graded “hasan” by Al-Albani in Sunan Abee Dawood, Hadeeth No. 4990.]